Brian Sampson, executive director of the Unshackle Upstate economic development initiative, has long been beating the drum for lower taxes and major regulatory changes across the state.
While Sampson sees signs of progress in Gov. Andrew Cuomo’s proposal to reform the state’s costly workers’ compensation and unemployment insurance programs, he also sees a need for other, long-sought reforms. Those include changes in the Taylor Law, which regulates how governments and labor unions negotiate contracts, and the Triborough Amendment, which keeps the provisions of lapsed contracts in place pending a new agreement.
Unshackle Upstate also continues to seek changes in the so-called Scaffold Law, which holds contractors automatically liable if a worker falls from a height, even if the worker contributed to the fall and the Wicks Law that critics say drives up costs by requiring multiple contractors on government projects
Q: What’s your sense of the state’s current economic programs and the Cuomo administration’s argument that it’s being much more responsive to the concerns of the business community upstate?
A: There are two forms of economic development. One is the incentives, and New York does a pretty good job putting incentives out there to retain local jobs and attract new jobs.
The one thing New York doesn’t is understand that the regulatory environment we’ve created is a disincentive to almost every employer. The best economic development tool that we have would be to take that regulatory burden that makes us No. 1 in the country in terms of the feeling that the government is not friendly to business. Fix that and the jobs will flourish. It’s the one thing that seems to be missing in the arsenal of economic development.
Q: The upstate business community has had a laundry list of legislative reforms, from changes to the Taylor and Scaffold laws to the Triborough Amendment, that it hasn’t been able to advance in the state Legislature. What needs to happen to get some movement there?
A: We have made some progress. There’s a new workers’ compensation reform bill that we worked on with the governor’s office. There’s a new unemployment insurance reform piece that we worked on with the governor’s office. Those two things will certainly go a long way toward helping our business community.
The issue that we have with things like Taylor and Triborough and Wick’s and Scaffold and prevailing wage is that they’re not sexy issues. They’re not things the average person really grasps and has a firm understanding of. Therefore, it’s very easy for our politicians to say they’re addressing it and then not address it.
Fix Taylor, fix Triborough, fix Wick’s, fix the prevailing wage and it costs you nothing. But there’s not that impetus there yet. We think the property tax cap is going to drive that conversation.
Q: How will the governor’s proposals to reform the workers’ compensation and unemployment insurance systems help?
A: Workers’ comp right now is based on potential indemnity. It’s going to switch to a premium, so what you pay now is based on what you, as an employer, use. They’re going to do some other regulatory reforms, automatic deposits to an aggregate trust fund, eliminating a reopened case fund, all things that will be about $900 million in annual savings to business.
The unemployment insurance side is much more complicated. We owe $3.4 billion to the federal government, which wants states to build a trust fund. We haven’t given unemployed workers a benefit increase since 1999. Very complicated.
What we’ve been able to do is put a plan in place that, over the course of the next decade, will pay down the feds, will build a trust fund, will put some other reforms in place from a fraud standpoint and will raise the benefit level to unemployed workers, but will do so in a way that’s cost neutral or cost negative to employers. We should start to see our unemployment insurance cost burden go down dramatically over the next four years.
Q: What do you think about the governor’s proposal to increase the minimum wage from $7.25 an hour to $8.75 an hour?
A: We’re opposed to it. You can’t raise the minimum wage by 20 percent and not expect it won’t have an impact on unemployment, particularly for our kids.
The last time New York raised its minimum wage, we saw employment for kids drop by about 21 percent. We’re concerned.
The proposals that are on the table right now just aren’t doable.
You can’t look at the minimum wage in a vacuum. It is about workers’ comp.
It is about unemployment insurance. It’s about youth employment. A lot of those jobs would go away.
Q: The governor’s office contends a higher minimum wage would stimulate the economy because low-wage workers will spend all of the increase in their pay.
A: It goes back to the same argument we had on raising the tolls on trucks using the Thruway. Ninety percent of what we consume was brought to us by truck – food, clothing, gas.
If you raise the minimum wage, food, clothing and gas is going to cost everybody more. So what you think you’re giving them through an increase in their wages, you’re actually going to take away because the goods that they have to purchase to live on a daily basis are going to cost more.
So how do you do that in a way that allows them to have more? We believe the way to do that is to increase the earned income tax credit, which goes directly to the families you’re trying to help.
Q: How have the regional economic development councils been working as a way to spur economic development across upstate?
A: It’s decentralized the process. It’s no longer people in the tall towers in Albany telling us what we should be doing in economic development. Every region in New York is different. Here in Western New York, you have Canada, but in other parts of the state you don’t. The strategic plan here should involve that binational cooperation. You don’t get that in the Finger Lakes. It’s helped to drive those conversations. It’s brought a community together on a plan.
Now what we need the state to do is couple their incentives to those regional plans so we make sure we’re getting the most bang for our buck.
Q: What’s more important: Incentives or improving the overall business climate?
A: You have to do both at the same time, but once you fix the regulatory environment, the need for incentives will be dramatically reduced.
But until we get to that place, the state still has to continue to provide those incentives.